DILI, East Timor (AP)--Malaysian troops officially withdrew Tuesday from East Timor after helping restore law and order in the troubled nation for about three months.

More than 400 troops of the Royal Malaysian Army Forces arrived in East Timor on May 25 to bolster the Australian-led peacekeeping force requested by the East Timor government after violence broke out in the capital Dili.

The violence, the worst in the country since its 1999 vote for independence after 24 years of Indonesian rule, erupted after then-prime minister Mari Alkatiri fired about 600 soldiers.

Clashes between rival security forces in the capital later spilled into gang warfare, looting and arson that killed 30 people and prompted nearly 150,000 to flee their homes.

Sporadic gang fighting has persisted and tens of thousands of people continue to be afraid to return home or are unable to because their houses were destroyed.

The U.N. Security Council last week authorized a mission of 1,600 international police and 34 military liaison officers ahead of presidential and parliamentary elections scheduled for 2007.

THE Australian Federal Police has defended an officer accused of ordering a senior East Timorese policeman to take off his uniform in public, saying two inquiries had found the officer had acted appropriately.

But in a statement released by East Timor's parliament, the country's powerful Interior Minister, Alcino Barris, disputed the agency's interpretation of regulations governing Timorese police and said he would lodge a formal protest about the incident with the Australian embassy in Dili.

"The Australian police did not respect either the dignity of the Timorese police institution or the dignity of Timor-Leste [East Timor] as a sovereign country," Dr Barris said. The statement said Dr Barris told MPs there was no instruction by the Timorese Government that directed Timorese police not to wear their uniforms in public.

"The minister defined the event unacceptable," it said.

The confrontation between an unidentified Australian Federal Police officer and the chief of East Timor's police academy, Julio Hornai, on a main road in Dili on Saturday prompted an angry response from East Timorese MPs, several of whom argued that the Government should retaliate by asking the Australian police to leave the country.

The commander of the 200-strong Australian police contingent in Dili, Steve Lancaster, told reporters late yesterday that Inspector Hornai became "agitated" and took off his uniform shirt and handed it to the Australian officer, who had explained to him that there was an agreement in place that Timorese police should not wear their uniforms in public.

Commander Lancaster said the Australian asked Inspector Hornai to put the uniform back on.

But Inspector Hornai has given a different version of the incident, saying that the Australian repeatedly demanded that he take off the uniform.

He said he was "humiliated" by doing so in front of about 40 onlookers.

Inspector Hornai said he and his men were ordered to wear their uniforms to an official briefing at police headquarters that was attended by dignitaries including the head of the UN's Dili mission, Sukehiro Hasegawa, and Dr Barris.

Commander Lancaster said an inquiry conducted by UN police had supported his own findings that at no time did any Australian police officer direct East Timorese police to take off their uniforms in public.

Commander Lancaster said the Australian police had acted in good faith in the incident.

It was for the safety and wellbeing of the East Timorese police that they had been directed not to wear their uniforms in public because of "mixed community feelings" towards them, he said.

Inspector Hornai is one of the most senior officers still serving in the Timorese police after the 3200-strong force disintegrated when violence erupted in Dili in late April.

The academy he runs will be at the centre of UN efforts to rebuild the force.

Dili is alive with the sound of high pressure hoses as 44 New Zealand Defence Force personnel prepare to return to New Zealand on Thursday 31 August.The troops are returning after the New Zealand Government’s announcement that the force in Timor Leste is to reduce as the country finds some stability after months of turmoil.In preparing the troops for home, the New Zealand Army has deployed a small force extraction team to Timor Leste.The team assists with returning stores and equipment, conducting robust medical checks and psychological debriefs to ensure a smooth transition back to New Zealand.Each soldier is responsible for cleaning their own equipment to strict MAF standards, and with months of dirt picked up patrolling the streets, it is no small task.An area of the Dili Port has been sectioned off with buckets of soapy water and high pressure hoses to allow the troops to get their equipment clean, with the hot Timor sun shining overhead to make sure everything gets dry.Everyone returning gets a medical review to make sure they have no injuries and that they haven’t been exposed to malaria, dengue fever or any other tropical illnesses prevalent in the region. The Doctor ensures they complete their course of anti-malarial medication and issues any further meds required to ensure a healthy return to New Zealand.Two New Zealand Army Psychologists have also deployed to Dili. They will conduct group and individual debriefs allowing returning personnel the opportunity to talk through their time Timor Leste..

AN AUSTRALIAN federal policeman demanded that a senior East Timorese police officer take off his uniform in public, in an incident that has angered Timorese politicians and could lead to a diplomatic protest.

East Timor parliamentary president Francisco Guterres, yesterday described the alleged behaviour of the unidentified Australian officer as an abuse of East Timor's rights as an independent country.

In an unprecedented move, Mr Guterres has summoned Timorese Interior Minister Alcino Barris to the Parliament today to explain what happened.

"All members of parliament want to complain about this," Mr Guterres said.

East Timor police academy chief Julio Hornai told The Age yesterday that he was "humiliated" by the incident, which "violated the dignity of East Timor".

"I don't have a problem with the Australian police who came to help solve our problems," Inspector Hornai said. "But it doesn't mean that they can come here and not respect us."

Inspector Hornai said that late on Saturday afternoon, he was driving a police vehicle along one of Dili's main streets when it was stopped by an Australian Federal Police LandCruiser carrying two Australian officers and two Malaysian soldiers.

One of the Australians confronted him, saying that he and seven other Timorese police in the vehicle should not be wearing police uniforms.

Mr Hornai said he tried to explain to the Australian that he and his men were returning to the academy after attending briefings at police headquarters.

Also present at the briefings was UN special representative Sukehiro Hasegawa.

Mr Hornai said that Mr Barris, who was also present, had ordered him and his men to attend the briefing in uniform.

But Mr Hornai said the Australian demanded that he take off his uniform, as a crowd of about 40 onlookers gathered nearby.

Mr Hornai said he removed the top part of his uniform and tried to hand it to the Australian.

"I felt humiliated … people were watching," he said. "The Australian then said put the uniform in the vehicle and they would escort us to the academy."

Mr Hornai said that when one of his officers got out near his home, the Australian demanded that he take off his uniform.

"The agent took it off in the middle of the road … in full view of the public," he said.

Antero Lopes, head of the international police in East Timor, last night described the incident as a "very sensitive situation".

Mr Lopes said the commander of the AFP in Dili "assured me that no AFP officer under his command has stripped a PNTL (Timorese police) officer of their uniform".

However, directives under bilateral arrangements with the international forces in Dili stipulate that Timorese police should be "restrained" in their use of their uniforms, he said.

The UN supports these precautions because there are "animosities among certain sections of the population against certain PNTL officers".

The police academy was the only police body that did not disintegrate when violence erupted in Dili in late April.

Under Inspector Hornai's command, the academy's 80 instructors and 283 police cadets did not join in the violence.

Mr Hornai has served as a policeman for 16 years, 10 of them under Indonesia's rule.

The academy will be the centre-point of efforts by the UN to rebuild the force of 3000.

Australia's 200-strong police contingent in East Timor is struggling to curb street gang violence, which left seven Australians injured last week.

This week on Dateline John Martinkus and David O’Shea conduct an investigation in to who exactly was behind the violence in East Timor that led to the downfall of that country’s first democratically elected Prime Minister.

In what looked like a well orchestrated plan to pit the tiny country’s armed forces and police against each other it appears the architects of the conflict manipulated the crisis to achieve one end – the resignation of Mari Alkatiri. Was it a coup? Were foreign powers involved? And what role, if any, did Australia play?